Expansion roadmap clear; Q1 margin compression tests bullish 2030 thesis

Occupancy 92% vs market; claimed RevPAR leadership undisputed in call

Operating EBITDA ₹47 Cr matches; 3% growth vs prior Q1, EBITDA margin solid but EBITDA growth lag vs revenue growth suggests margin compression

Delivered PAT ₹11.5 Cr (close), -14.4% YoY matches; finance costs and tax regime shift cited, tax rate will drop to 25% in Q2 onwards

₹21 Cr received Q1; ₹70-80 Cr FY27 guidance consistent with ₹300+ Cr target run-rate; sales pace strong

17→111 in ~5 years CAGR ~36% (21.5% is conservative); 140 target requires 29 more in remaining 8 months—execution risk but pipeline mapped

Prior FY26 call guided 672 keys in 14 months; now detailing 4-year roadmap to double hotel count (42→87) plus 3x+ asset-light expansion. Same capex envelope (₹1,500 Cr net EM Bypass), but targets higher ambition with leverage.

Prior ₹300-350 Cr guidance confirmed; now showing phased receipt (FY27 ₹70-80 Cr already tracking, ₹21 Cr received Q1). Sales strong (33/69 apartments sold, ₹20,633/sqft realization). On track.

Prior call suggested 14 new Flurys in Q4 FY26; now spreading 29 across full FY27. Pipeline fully mapped but execution risk evident. Long-term 400 by 2030 reaffirmed, but pace is incremental vs prior aggressive phasing.

Balance sheet guidance hit; strong deleveraging trajectory on track. Financing plan for ₹1,500 Cr capex secured via EBITDA + EM Bypass asset sales.

Q1 faced West Asia crisis, air traffic flat/declining (international -10%, Mumbai -3.5%, Hyderabad -12%, Chennai -13%). High single-digit ADR growth expected Q2-Q4 from BRICS, weddings, conferences. Palace properties (Ras Baan 33k ARR, Lotus 13k ARR) stabilizing to drive mix-up. Quarters ahead distinctly better than Q1.

Flurys grown 21.5% CAGR since 2019 (17→111). FY27 plan 29 outlets (Pune 3+5 planned, Mumbai 3, Hyderabad 5, NCR 7, Bangalore 4). Signed partnerships: Adani airports, Phoenix, DLF, PVR 10 outlets simultaneously. By 2030, 400 outlets. Execution on track; pipeline fully mapped.

Mutual fund income ₹2.73 Cr sustainable; ~₹3.5-4 Cr quarterly ongoing. ₹21 Cr EM Bypass proceeds received Q1, ₹50 Cr more expected FY27, growing mutual fund pool to ₹150+ Cr total. Other income likely to increase, not decline.

All current 42 hotels at mature or entering maturity. Ras Baan Patiala & Lotus Palace Chettinad (opened last year) already at 33k & 13k ARR, stabilizing this year. Vembanad Lake (15 keys) seasonal, peaks Q4. Calcutta & Vizag (open 2030) in supply-constrained markets (5,111 keys metro Calcutta, limited Vizag inventory) expect high-performance opens. Stabilization 2-3 years typical; <1.5 years in high-potential markets like Mumbai.

EM Bypass mixed-use model proven best: ₹70 Cr FY27, ₹120 Cr FY28, ₹100 Cr FY29, ₹30-40 Cr FY30 = ₹300-325 Cr proceeds fund hotel at same site (virtually free). ROCE expected to double from 9-10% to 20%+ by 2030. Similar model planned for Pune (FSI expanded 2.5L→6.7L sqft). Mixed-use development is preferred path forward vs pure hotel (long payback, constrained returns).

5-year capex portfolio: Pune 200r, Navi Mumbai 250r, Vizag 100r, EM Bypass 220r, Jaipur 150r @ ₹1.2 Cr/room = ₹1,140 Cr. Plus acquisitions (Zillion ₹210 Cr, Juhu renovation ₹80 Cr, Kochi ₹64 Cr) = ₹350 Cr. Plus operational capex ₹40 Cr/year + Flurys ₹40 Cr/year. Total ₹1,500 Cr, less ₹350 Cr EM Bypass = ₹1,150 Cr net. EBITDA ₹240-250 Cr/year self-funds ₹1,300 Cr over 4-5 years. FY27 ~₹200-250 Cr.

PAT decline due to ₹2.5 Cr higher finance costs (Zillion acquisition debt, will reverse) and ₹2.2 Cr deferred tax provision (new income tax regime shift 35%→25%, Q2 onwards tax rate drops). Q1 tax rate 40% (abnormal); future quarters 30-35%. Compare PAT to Q4, not Q1 prior, for cleaner trend. Underlying EBITDA resilient.

Juhu example: acquisition ₹40k/sqft (vs market ₹1L+, rule-change advantage), current ARR ₹18-20k (will grow 10-15% like Mumbai market), low supply, F&B-strong market, strategic location. Expect very high results from year one. Market selection criteria: location, supply-demand tight, ARR trajectory upside, brand fit. High-potential markets (Mumbai, Pune) stabilize in 1-1.5 years vs 2-3 years for resort/new markets.

Mutual fund portfolio: ICICI bonds, Nippon (₹23 Cr @ 5.91% yield), ICICI 3-6 fund (7% yield). Debt funds held for acquisition liquidity. Regular vs direct fee comparison offered offline. Claimed returns competitive (₹2.8 Cr Q1 income from MF). Investor relations to re-send corrected list.

Projects: Juhu 78r (launch Oct 2027), Vizag 100r (launch this month Aug 2026), Kolkata EM Bypass 220r (complete by 2030), plus Pune, Navi Mumbai, Jaipur. New room additions to drive consolidated revenue growth.

Ambition target; dependent on market conditions, capex execution, and demand trajectory. Asset-light model (managed properties, Flurys franchises) key to scaling without proportional capex.

Q1 EBITDA growth (3%) lagged revenue (8%), signaling input cost pressure (energy, supply chain cited). New hotels and portfolio maturation expected to drive margin uplift by 2030. No explicit EBITDA margin target for FY27/FY28 provided.

Q1 tax rate abnormal (40%) due to regime shift; drops to 25% effective Q2 onwards. Finance costs from acquisition debt (Zillion) to normalize as integration completes. ROCE expected to double (9-10% → 20%+) by 2030 on mixed-use model.

@ ₹1.2 Cr per room build cost. EM Bypass contribution ₹350 Cr from residential proceeds. Long-term financing for Juhu secured. FY27 capex ~₹200-250 Cr. Operational capex ₹40 Cr/year, Flurys ₹40 Cr/year.

Pipeline partnerships signed (Adani, Phoenix, DLF, PVR); execution risk on store openings. 111→140 FY27 (29 more) requires 8-month execution; subsequent ramp-up to 400 ambitious but plausible if partnerships unlock.

International air traffic into India declined 10% Q1 due to West Asia crisis. Domestic traffic flat YoY; major metros (Mumbai -3.5%, Hyderabad -12%, Chennai -13%) saw passenger arrival declines. International guests typically higher-margin, pricing power; declines could extend beyond Q1 if geopolitical tensions persist.

All-India market ADR growth only 6% in Q1; own ARR growth flat/negative inferred from occupancy-only gains. Management guidance 'high single digit' ADR growth (6-8%) from current depressed base is conservative, signaling structural softness. New property stabilization (Ras Baan Patiala, Lotus Palace Chettinad) dependent on this modest ADR trajectory.

Flurys at 111 outlets; target 140 by YE FY27 requires 29 more in 8 months. Prior call suggested aggressive Q4 FY26 phasing (14 stores); now spread across full year signals execution tightness. Long-term 400-outlet target by 2030 depends on partnerships (Adani, Phoenix, DLF, PVR) materializing; partnership pipelines nascent, execution uncertain.

₹1,500 Cr capex roadmap (net EM Bypass) assumes ₹350 Cr contribution from EM Bypass apartment sales. 33 of 69 apartments sold Q1 (48%); if sales slow or market softens, cash inflow delays would stress capex execution and ROCE targets. Hotel funding tied to this model; any shortfall forces higher leverage or capex cuts.

Q1 EBITDA +3% growth lagged revenue +8% growth; despite 43% F&B mix (typically accretive), margins compressed. Management cited energy cost inflation and supply chain disruptions. If input costs remain elevated or demand softens further, margin recovery delayed. Mix shift risk if higher-margin F&B grows slower than rooms.